June 8, 2012

PICKED A BAD WEEK FOR THAT COLUMN:

U.S. debt load falling at fastest pace since 1950s (Rex Nutting, 6/06/12, MarketWatch)

If you want to know why economic growth has been so tepid, here's your answer. Four years after the storm hit, the economy is still deleveraging. And it's very hard for any economy to grow when everyone is focused on increasing their savings.


Total domestic -- public and private -- debt as a share of the economy has declined for 12 quarters in a row after surging over the previous decade.
The rapid rise in federal debt over the past four years has distracted us from the big picture. The level of public debt is indeed worrisome, but it's not as big a worry as the economy's total level of debt -- public and private.

Although we have a whole cottage industry devoted to warning us about the dangers of too much public debt, we don't have any comparable Cassandras telling us about the dangers of too much private debt. 

US household net worth surged in 1Q on rising stocks, increased home values (Associated Press, 6/07/12)

MORE WEALTH: U.S. household wealth, or net worth, rose 4.7 percent to $62.9 trillion last quarter, according to a Federal Reserve report released Thursday. Net worth is the value of assets like homes, bank accounts and stocks, minus debts like mortgages and credit cards.

Posted by at June 8, 2012 9:42 PM
  

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